AREA BUSINESS PICTURE INDUCATES IMPROVEMENTS

Employment growth and retail sales were flat in Southeast Missouri during the first quarter of 2001, but some promise of economic improvement exists in the months ahead.

"There has been a definite slowdown in the U.S. and Southeast Missouri economic growth rate," said Dr. Bruce Domazlicky, Southeast Missouri State University professor of economics. "I think we've avoided a recession and things could get better soon."

Domazlicky, who heads a university team that provides a quarterly economic outlook report, predicts housing sales will pick up because mortgage rates have fallen, the gross domestic product -- the country's total output of goods and services -- could continue at its 2 percent pace and inflation could be around 2.5 percent this year.

One of the early surprises has been the 2 percent rise in the GPD from January through March, which is nearly double the increase that was expected. Forecasts are for GDP growth to remain low during the first half of the year before picking up to a 3 to 3.5 percent rate over the final six months.

"Retail sales zoomed everywhere in January, but they slowed down the past two or three months," Domazlicky said.

Even with flat retail sales, Cape Girardeau County is on a path to hit the billion-dollar sales mark again this year.

Cape Girardeau received $2.7 million from its share of retail sales taxes for the first quarter of 2001. The amount is $24,000 more than the final quarter receipts from 2000, an insignificant increase, said John Mehner, president of the Cape Girardeau Chamber of Commerce.

"And fewer jobs are being reported in the job market," Mehner said. "There are not as many jobs being advertised as this time a year ago."

Employment was virtually unchanged in the 24-county area during the fourth quarter. The year-end unemployment rate in the region was 4.2 percent, ranging from 2.2 percent in Perry County, 2.6 percent in Cape Girardeau County and 3 percent in Ste. Genevieve County to 7.5 percent in Mississippi County, 8.2 percent in Wayne County and 8.9 percent in Reynolds County.

Employment growth is expected to accelerate later this year.

"Personal income could grow by about 4.2 percent for the year," Domazlicky said. "That's a bit below the growth rate of the previous year but still a healthy figure."

Others involved in the Southeast Missouri Business Indicators economic outlook report include Dr. Gerald McDougall, dean of the Donald L. Harrison College of Business; Dr. Bert Kellerman, associate dean; and Dr. Kenneth Heischmidt, director of the university's master's degree in business administration program.